The polyolefins major may drop links to pricing services

Borealis chief financial officer Clive Watson says the company’s opposition to the planned London Metal Exchange futures market for polymers has hardened since its views on the subject were first expressed.

“It is inconsistent with our strategy of providing value to our customers,” he said in London yesterday. The polyolefins company is also considering dropping its use of pricing links based on price-reporting services such as Platts and ICIS, he said. Dissatisfaction among some polymer suppliers with the use of these figures to set contract prices has been one of the spurs to the LME’s planned futures market.

Borealis’ opposition to the LME plans arises from an opinion that its products should not be treated as commodities. Its plans for fixed-price contract will alleviate its need to rely third-party pricing services. Borealis is Europe’s second largest polyolefins producer with around 3.5 million tonnes of installed capacity.